Uncertainty Grows Over Federal Funding for Hispanic-Serving Institutions

California colleges are trying to determine whether a long established federal grant program that supports campuses enrolling large numbers of Hispanic students will operate this year or remain paused. Administrators across the state are reviewing budgets and student support services after months of uncertainty surrounding Hispanic Serving Institution funding.

According to EdSource, the U.S. Department of Education moved last year to end grant competitions for Hispanic Serving Institutions and other Minority Serving Institutions, describing the programs as discriminatory and unconstitutional. Many campuses assumed they would no longer be able to seek the additional federal funding and began planning for reductions. A federal spending agreement approved this month, however, preserved level funding for Title V and Part A of Title III, the programs that finance HSIs and MSIs. The money remains in the federal budget, yet whether grants will actually be distributed remains unclear.

167 Campuses and $600 Million in Grants

California is home to 167 Hispanic Serving Institutions, the largest number of any state. Over the past 30 years, those colleges have received more than $600 million in HSI grants. The funding has supported dual enrollment opportunities, graduation initiatives, counseling services, and academic programs designed to improve completion rates.

To qualify as an HSI, a college must enroll at least 25% Hispanic undergraduate students. Many California campuses meet that requirement, reflecting the state’s changing demographics and the growing presence of Latino students in public higher education.

When $350 million in MSI funding was cut nationally last year and redirected elsewhere, California campuses absorbed notable losses. California State University institutions lost $43 million in anticipated grants, and community colleges lost $20 million. College leaders began evaluating which programs could continue and which would require new funding sources.

Hispanic-Serving Institutions Are Waiting for Direction

Education officials in California have indicated that lawmakers intended the recent spending bill to allow HSI grants to move forward this year. Still, the programs are discretionary, meaning the Department of Education decides whether to hold grant competitions and allocate funds.

Some campus leaders have expressed hope that they will be able to apply during upcoming funding cycles, while recognizing that the department’s earlier legal position on the programs has not formally changed. Researchers who study Minority Serving Institutions have noted that the grants have historically enjoyed broad support, yet recent developments have introduced instability for campuses that rely on predictable funding streams.

Supporters of the programs point out that HSI grant dollars typically fund services available to all students, including advising centers and academic support initiatives.

In a recent letter addressed to Education Secretary Linda McMahon, a group of senators urged the department to allocate the funds in line with congressional intent. The letter cautioned that suspending established programs without a court ruling creates uncertainty for colleges and students who depend on consistent support.

A State Level Backup Plan

While awaiting federal guidance, California lawmakers are exploring options at the state level. Assemblymember Marc Berman introduced Assembly Bill 2121, which would allow community colleges to replace lost MSI or TRIO funding without violating an existing state requirement that 50% of college budgets be spent on instructor salaries and benefits.

The proposal would create a 5 year exception, or remain in place until federal funding is restored, excluding replacement dollars from the 50% calculation. Nationally, 120 TRIO programs lost funding last year, affecting services that help low income students access and complete college.

The California Community Colleges chancellor’s office, which oversees 116 campuses, has advised local colleges to prepare this summer as though HSI grant competitions will proceed. Administrators are drafting applications and reviewing program proposals while recognizing that final decisions rest with federal officials.

The HSI designation was established in 1992, and federal funding began in 1995. For decades, the grants have supported campuses serving large Hispanic populations. California colleges now face a period of uncertainty, balancing hope that funding will resume with the practical need to plan for multiple outcomes.